Leveraging a Standardized State Methodology that Measures Behavioral Health Clinical Spending to Improve Care

Abstract

More Americans are being diagnosed with behavioral health conditions, and nearly half will have a behavioral health issue, such as depression, anxiety, and opioid addiction, in their lifetime. State officials are increasingly interested in identifying ways to improve access to high-quality behavioral health care and promote appropriate levels of spending to support these services. Defining and tracking how much payers spend to treat behavioral health conditions is an important early step for many states. This report discusses states’ use cases for a standardized approach to measuring behavioral health spending and considerations for implementation, leveraging recommendations for a standard methodology published in a previous Milbank report.

Background

Today, 12 states measure how much payers spend on clinical care to treat behavioral health conditions. Three of those states — Maine, Massachusetts, and Rhode Island — measure behavioral health spending across the clinical care continuum. These three states’ approaches to measurement are largely similar, defining spending using a combination of diagnosis codes, procedure codes, and provider taxonomy codes. Some also measure spending paid through non-claims payments. However, the state code sets used to define spending, categories of non-claims payments, and technical specifications vary. Several states share an interest in developing a standardized methodology that supports greater comparability, utilizes best practices, and reduces data submitter burden. To support a standardized approach to behavioral health spending measurement, the Milbank Memorial Fund commissioned Freedman HealthCare to convene an Advisory Group of state leaders and subject matter experts to consider ways to develop a comprehensive framework that could standardize measurement. The Advisory Group met twice to discuss ways a standardized methodology and code set could be used and to identify key considerations for measuring behavioral health clinical services and non-claims spending. The Advisory Group noted three distinct “use cases” for behavioral health data collection that could benefit from a standardized methodology (Table 1):

• monitoring statutory or regulatory compliance related to behavioral health (i.e., mental health parity),
• improving service delivery through state budget reform, and
• setting spending targets for behavioral health services.

Table 1. State Use Cases for Behavioral Health Data Collection

Discussions among Advisory Group members centered on key decisions such as which diagnosis codes, provider taxonomies, care settings, and non-claims clinical spending categories to include in a methodology for behavioral health spending measurement. Informed by these Advisory Group discussions and interviews with additional national experts, Freedman HealthCare developed a report detailing recommendations for a standardized state methodology, with a companion code set. Freedman HealthCare then worked with payer experts to develop technical specifications informing implementation of the methodology.